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• . Average capital employed14,00,000. Net profit 2011 2,50,0002012 1,00,000 (loss) 2013 4,50,000 NRR10% Goodwill at 3 years' purchase ofsuper profit will be |
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Answer» Explanation: Average profit = Total Trade profits/ NUMBER of years profits = 250000+ 450000 - 100000/5 = 700000-100000/5 = 600000/5 = RS. 1,20,000 NORMAL profit = AVG capital employed X Normal Rate of return = 14,00,000 X 10/100 = Rs. 1,40,000 Note : we are not calculated SUPER profit because the excess of normal profit over Avg profit super profit = Avg profit - super profit = 120000 - 140000 = - 20,000
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